By: Brice R. Mbodiam
(Business in Cameroon) - During the three FY2015, 2016 and 2017, Cameroon’s airline Camair-Co has witnessed cumulative losses of more than XAF34 billion with peak losses of XAF16.2 billion and XAF14.1 billion, respectively in 2015 and 2017. At the same time, according to authorized sources, the company run negative equity in 2017, amounting to XAF57.1 billion.
According to an expert, the government which owns 100% of Camair-co should already have decided on its early dissolution, within the meaning of Article 664 of the Ohada Uniform Act on Company Law and Economic Interest Grouping (EIG).
The article stipulates that if the dissolution of the company is not pronounced after successive losses, the company is required, at the latest at the end of the 2nd financial year following that in which the losses were recorded, to reduce its capital. This capital reduction must be at least equal to the amount of losses that have not been offset against reserves if, within that period, shareholders' equity has not been rebuilt to a value of at least half of the share capital.
An analysis of the situation showed that the government is not willing to dissolve Camair-co, even if the company's financial situation allows it. Whilst the State will soon have to reduce the company’s capital (in the absence of strengthening its own funds) to remain in compliance with the Ohada Uniform Act, it has instead opted to attempt yet another rescue operation for this airline.
This new recovery plan, under which the State will pump XAF6 billion in the company, comes after a previous plan proposed in 2016 by Boeing Consulting. As a reminder, the Boeing plan provided, among other measures, for the clearance of a debt estimated at more than XAF30 billion and the injection of XAF60 billion. Funds were intended to launch the company's freight activity, strengthen its fleet to 12 aircrafts, and to set up an aircraft maintenance system in the Cameroonian economic capital, in order to avoid subcontracting abroad that was considered too expensive.